Universal Credit claimants up one million in one year, as experts issue alert

New statistics from the Department for Work and Pensions have shown eight million people are currently receiving Universal Credit. This marks the highest figure since the benefit was first launched in 2013 and represents over a million more claimants than the previous year. In July last year, 6.9 million claimants were recorded.

Universal Credit is designed to help with the cost of living for those who are unable to work, currently out of work or in low-income employment. Experts are sounding warnings about this final group specifically, highlighting the economic consequences of having workers who cannot survive on their wages alone and must depend on government assistance to get by despite being employed.

Currently, 34% of Universal Credit claimants are in employment, whilst 46% fall into the "no work requirements" bracket.

Whilst some analysts attributed these climbing numbers to the broader economic climate, others highlighted the impact of Labour's welfare reform introduced earlier this year.

Originally called the Universal Credit and Personal Independence Payments Bill, this legislation contained some controversial proposals changing the eligibility criteria and payment amounts for both benefits.

Major concessions were made before the Bill was voted through the House of Commons, but one reform still in the pipeline is changes to the health element of Universal Credit that will halve and freeze the amount that people receive if they apply for the benefit after next April.

Samuel Mather-Holgate, Independent Financial Adviser at Mather and Murray Financial, commented: "It's no surprise if you frighten the life out of a population telling them new claimants are not going to get enough to live on, you get a lot of people trying to beat the deadline. Now the government has rowed back on their proposals, these figures should settle down."

However, other experts believe there's a bigger narrative driving these figures. Keith Budden, Managing Director at Ensurety, stated: "For me, the most important statistic here is not that Universal Credit claimants have increased by almost a million but that 34% of the claimants are 'in work', i.e. not lazy layabouts as some might say, but hardworking men and women who simply aren't earning enough to survive - and we know many of these are having to use food banks too.

"How have politicians of all colours allowed our economy to reach this situation, where employers in the public and private sector aren't paying their staff enough to achieve a basic level of income?".

Pete Mugleston, Mortgage Advisor & Managing Director at onlinemortgageadvisor.co.uk, commented: "A rise of over a million people on Universal Credit in just a year reflects the economic difficulties many families are facing. It suggests more households are struggling to find secure, well-paid work and are relying on the safety net to get by.

"This puts the government's core priority of delivering growth under greater scrutiny and raises questions over how it will manage the growing fiscal cost of supporting so many people."